Brexit negotiations weighing on the Pound

This week is absent of any data releases for the UK and as such the pound has been trading relatively flat ahead of an extremely busy few days next week. Instead, any small changes on exchange rates have been driven by either technical signals or movement in other currencies as see yesterday. EUR/USD dropped just over 0.5% yesterday with a slightly stronger US Dollar, and this saw GBP/USD also drop away from the 2-week highs seen yesterday. On a more positive note, the subsequent weakness in the Euro enables GBP/EUR to edge very slightly higher in the afternoon to the best buying levels seen in March.

GBP/EUR has now recovered nearly 2 cents peak to peak over the last 9 days after a drop of 3.5 cents the week before. Rates have been slowly downward trending for the last 2 months and continue to do so with the current uncertainty surrounding the Brexit negotiations weighing on the Pound. Corrections of this sort can provide a good buying opportunity for those with an imminent requirement as the odds still support a return to the 3 months lows seen only last week. Rates are likely to be fairly stable going into next week however the risk levels of bigger changes in the rates will step up dramatically come Tuesday. In 3 days we will have 4 of the biggest monthly announcements for the UK with Inflation, Unemployment, Retail Sales and a BoE interest rate decision set to dominate the weeks’ headlines.

If you do not wish to gamble on the chance of next week wiping out all the recent gains, then speak to your broker today about a protection STOP LOSS, or a Forward Contract that can guarantee you the current rates for your required delivery date. Today is another quiet day for eco stats with just Euro-zone inflation figures to watch out for at 10 am.